IMPACT OF INFLATION OF RENTAL VALUES OF COMMERCIAL PROPERTIES IN JOS, NIGERIA

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Department of Estate Management

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ABSTRACT

This study aimed at assessing the impact of inflation on rental values of commercial properties in Jos metropolis. Rental values and Inflation were examined. Pertinent Literatures were reviewed on the subject matter and data were collected which included both primary and secondary data. Questionnaires were administered, with oral interviews and field survey. The trend in rental values and inflation was examined for the study period, 1990-2014. It is important to state that the type of commercial properties analyzed in the study locations were basically shops and offices. The collected data were analyzed using descriptive statistical techniques, Analysis of Variance (ANOVA) and Regression analysis. The results show that unexpected inflation affects the rents of commercial properties in Jos by15.5% this shows that commercial property is a good hedge against inflation. It is recommended that NIESV Jos branch should ensure that for every location, there should be a range of rent per meters square so as to avoid over pricing of rent by the landlords.

TABLE OF CONTENTPAGES

Title page

Declaration ii

Certification iii

Dedication iv

Acknowledgements v

Abstract vi

Table of content vii

List of tables xi

List of figures xii

CHAPTER ONE 1

1.0 Introduction 1

1.1 Background of the study 1

1.2 Statement of the problem 3

1.3 Aim and Objectives of the study 3

1.4 Research Questions 4

1.5 Research Hypothesis 4

1.6 Scope of the study 4

1.7 Significance of the study 5

1.8 Limitation of the study 5

1.9 Geographical Location of the Study Area 5

1.10 Population and Economic base of the study area 6

1.11. Tourism and Religion 7

CHAPTER TWO 12

2.0 Literature Review 12

2.1 Commercial property investments and rental growth expectations of investors

in Nigeria 13

2.2. Inflation 13

2.2.1 Categories of inflation 14

2.2.2 Types of inflation 16

2.2.3 The general effect of inflation 17

2.2.4 Inflation control 18

2.3 Concept of rent 19

2.4.1 Rental value 20

2.4.2 The Bid Rent Theory 20

2.4.3 Modern Theory of Rent 21

2.5 Types of Rent 21

2.6 Factors determining rental value 22

2.7 Concept of Property 23

2.7.1 Classes of Property 24

2.7.2 Types of Property 25

2.7.3 Commercial Properties 27

2.7.4 Types of Commercial Properties 27

2.8. Empirical Review 29

CHAPTER THREE 32

Research Methodology 32

3.1 Population for the Study 32

3.1.1. Sampling Frame 32

3.1.2 Sampling Element 32

3.2 Sampling Technique 32

3.3 Sampling Size 32

3.4 Methods of Data Collection 33

3.5 Sources of Data Collection 34

3.6 Data Handling Techniques 34

CHAPTER FOUR 36

Data Presentation, Analysis and Discussion of Results 36

4.1 Data for the Study 36

4.2. Rental Levels of Commercial Properties in Jos Metropolis from 1990-2014. 37

4.3. Analysis of Data 39

4.3.1. Rental Growth of Commercial Properties in Jos 44

4.3.2. Rental Growth of Shops 44

4.4. Analysis of Variation in Rent/m ² Across Commercial Properties in Jos. 46

4.5. Inflation Rate in Nigeria. 47

4.6. An Extermination of the Effect of Inflation on Rents of Commercial

Properties in Jos. 50

Testing of Hypothesis 56

4.7. Discussion of Results 56

4.7.1 Examine the Rental Levels of Commercial Properties in the Study Area. 56

4.7.2 Determine the Variation in Rent Across Commercial Properties

(Shops and Offices) 57

4.7.3 Examine the Trend of Inflation Rate in Nigeria. 57

4.7.4 Examine the Effect of Inflation on Rents of Commercial Properties in Jos. 57

CHAPTER FIVE 58

Summary of Findings, Conclusion and Recommendations 59

5.1 Summary of Findings 59

5.2 Conclusion 60

5.3 Recommendations 61

Reference 62

Appendix 64